VAT Cost Sharing Exemption Manual

Introduction: What is the new Group 16 to Schedule 9 of the VAT Act 1994

Group 16 - supplies of services by groups involving cost sharing

Item No

The supply of services by an independent group of persons where each of the following conditions is satisfied:

each of those persons is a person who is carrying on an activity (‘the relevant activity’) which is exempt from VAT or in relation to which the person is not a taxable person within the meaning of Article 9 of Council Directive 2006/112/EC,

the supply of services is made for the purpose of rendering the members of the group the services directly necessary for the exercise of the relevant activity,

the group merely claims from its members exact reimbursement of their share of the joint expenses, and

the exemption of the supply is not likely to cause distortion of competition.